Fraud Increases During Economic Downturn
The number of fraud incidents and the dollar amount of losses due to fraud both increased during the recent recession. These are findings from "Occupational Fraud: A Study of the Impact of an Economic Recession", copyright 2009 by the Association of Certified Fraud Examiners. Specifically, the study found an increase in employee embezzlements.
Increases in fraud stemmed from the pressure of increased financial strain on organizations and on individuals, according to the study. During a downturn the opportunities for fraud may increase as cuts are made to the workforce, which may in turn lead to internal controls being eliminated as a consequence of staff reductions. In addition, bad financial news may allow individuals to rationalize previously unthinkable acts.
The study confirms that fraud prevention measures are essential during periods of financial distress. For more information on the study, go to:
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Date this Avoiding Pitfall was most recently published: 06/29/2012